Prayers for DEFENSIVEDIV THEME investors as it destroyed investor wealth

Defensive Dividends significantly underperformed on Tuesday. It delivered -0.01% to close at 1286.12. On a day when the overall market breadth was 34%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

Buy-and-Hold investors in ~DEFENSIVEDIV experienced a maximum drawdown of -10.63% over the last three months. It delivered -9.48% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +7.55%.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~DEFENSIVEDIV has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 30 Jun, 2016 to 12 Mar, 2018. Over the last 2 years 11 months and 14 days, ~DEFENSIVEDIV outperformed the SP500 index on 52% days.

~DEFENSIVEDIV returned losses on 54% days in the last three months. During this time, it delivered on average -0.15% per day. It delivered it's worst daily return of -2.36%, during this period, on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -3.95% of investor capital.

The last 12 months saw ~DEFENSIVEDIV's investors making profits in 8 months and incurring losses in 4 months. During the last year, ~DEFENSIVEDIV and SP500 index had the same number of profitable months. ~DEFENSIVEDIV was also a less risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -6.08% compared to -7.75% returned by SP500 index in Dec 2018. ~DEFENSIVEDIV and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both ~DEFENSIVEDIV and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Money is like manure. You have to spread it around or it smells.

~DEFENSIVEDIV is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ~DEFENSIVEDIV's volatility from 19 Sep, 2018 to 4 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ~DEFENSIVEDIV has significant positive skewness in it's return distribution. This indicates that investors can expect ~DEFENSIVEDIV to recover from drawdowns quickly. Which makes ~DEFENSIVEDIV a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

~DEFENSIVEDIV has more chance of extreme outcomes than the SP500 index. Therefore, ~DEFENSIVEDIV must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than ~DEFENSIVEDIV.

Based on your interest in ~DEFENSIVEDIV you may find it interesting to know that ~JUNKFOODS has delivered similar performance as ~DEFENSIVEDIV and can be considered as an alternative investment candidate (to ~DEFENSIVEDIV).

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All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

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